Turning Returns Into Opportunities

While the explosive growth of digital shopping in 2020 led to more sales, it also caused a spike in returns as shoppers discovered some of their online purchases didn’t fit, were defective, or failed to meet expectations. For most retailers, an influx of returns expose costly operational weaknesses for processing returns, as well as untapped opportunities for parlaying returns into additional sales through nonstore channels.

E-commerce sales may be cooling down for some businesses from their previous breakneck pace, but returns remain top of mind. The smoother the return, the happier the customer, but is it worth the cost? Are you thinking about what a well-oiled returns process looks like and how your company’s contact center can serve as a lever for creating better customer experiences and business growth?

The Reality

When it comes to the returns process, communications between retailers and consumers is often characterized by a disconnect. Retailers have long grappled with the tension between providing an easy experience for the customer and managing the associated costs of making it easy. Added to that is the desire to leverage each of these interactions for driving more revenue. None of these are new challenges, so why have they yet to be fixed?

Not surprisingly, the No. 1 reason customers reach out to a company’s contact center is to inquire about the status of their order, but returns-related inquiries aren’t far behind. The enormity of the opportunity is easy to see considering returns totaled a whopping $761 billion in merchandise last year, and 16 percent of transactions involve returns, some much higher in certain product categories

With in-store returns, it’s easier to provide customer service face-to-face. Solving the problem or finding a better product is fairly straightforward compared with online interactions. In the online world, solutions require a more innovative approach.

The Potential

Consumers increasingly expect brands to be easy to do business with and to offer them the means of interacting seamlessly across channels, anytime and from anywhere. However, to not only meet but also surpass customer expectations, and to do so in a cost-effective way, thinking differently about how you service a customer is a “must solve now” imperative.

An artificial intelligence (AI)-driven online returns process is one way to make things easier for customers and lessen agent workload. With AI, many return inquiries don't require any human interaction and AI can still create an opportunity to turn a return into a sale. You can also equip your agents with the data and tools to operate like an in-store associate. There's no reason they can’t suggest a different product that may be a better match to the customer’s needs, from wherever the customer is engaging.

Balancing automation and self-service, while enabling agents to deliver extended, personalized experiences for the customer, represents a lucrative proposition for retailers and the chance to build customer loyalty, ultimately making customers happy by getting the product they want and need.

Another opportunity many retailers aren’t thinking about is the source of real-time insights into why customers are reaching out to their brand. Data captured through interactions yield valuable insights. By analyzing real-time data from return reason codes, retailers can gain much quicker awareness of potential product issues and share that feedback to their product teams and vendors to address the problems and satisfy customers.

The Considerations

Retailers are always keeping a firm focus on the bottom line; however, this need not come at the expense of the customer. The reality is no matter how accurately you design, produce and plan products, until online shopping allows for experiences that emulate in-store experiences, returns are here to stay. With an optimized returns process retailers can offset cost by turning a customer who wants to return a product into a customer that's happy with their product. To frame the process, keep these objectives in mind:

1. Optimize inventory.

What's your reverse logistics strategy? What will you do with the inventory that's being returned, and how will you get it to the place that's going to sell as quickly as possible?

2. Enhance the relationship.

How are you using the returns moment to uncover an opportunity to enhance the relationship with the customer via your virtual and human agents?

3. Drive revenue.

How do you equip your agents to upsell and cross-sell when a customer wants to return a product?

The contact center is an engine for powering all of the above: efficient processes, better customer relationships, and business growth. Designing the ideal returns process takes customer lifetime value (CLV) into account and plans for the long game. Customer self-service returns should be smooth and pain-free, even if there’s strong temptation from the retailer to avoid a return, which could erode CLV.

Whether a return is automated or through a contact center, reason codes should be thorough, correlated with the associated journey, and analyzed. An automated prompt requesting the reason for return creates potential for a new experience. A customer may start the returns process with self-service and, at some point during the interaction, opt to speak with an agent — creating a new upsell opportunity.

Key Takeaways

Returns are a thorn in the P&L of retailers, and there’s a largely untapped path, via the contact center, to offset the cost by growing sales. As digital engagement and transactions continue to grow, the role of the contact center is becoming increasingly more important in your CX strategy, and that includes product returns. Your contact-center agents are as much brand ambassadors as your in-store associates. Enabling your agents to upsell and cross-sell and applying new key performance indicators, like revenue per agent, are new, or forgotten, concepts for many retailers. And it’s not just your human agents you should equip; you should also be training your chatbots to provide tailored experiences that create sales opportunities.

By streamlining the returns process and engineering the contact center to serve as the hub for “all things customer,” retailers can harness a powerful ally for building customer loyalty and fuel tangible business outcomes. How is your contact center positioned for growth?

Shannon Flanagan is vice president, global industry strategy, retail and consumer goods at Talkdesk, an end-to-end cloud contact center and customer experience solution.